IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17^TH DAY OF FEBRUARY, 2026 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MR. JUSTICE C.M. POONACHA COMMERCIAL APPEAL NO. 372 OF 2024 BETWEEN:

1. STATE BANK OF INDIA HAVING ITS OFFICE AT:

STRESSED ASSETS MANAGEMENT BRANCH STATE BANK OF INDIA

2^ND FLOOR, OFFICE COMPLEX BUILDING LHO CAMPUS, #65, ST. MARK'S ROAD BENGALURU - 560 001 REP. BY ITS AUTHORISED SIGNATORY MR. SAMJI SUDARSHAN …APPELLANT (BY SRI LOMESH KIRAN N., ADVOCATE)

AND:

Digitally signed by PRABHAKAR SWETHA 1. M/S. PATEL ENGINEERING LIMITED KRISHNAN HAVING ITS REGISTERED OFFICE AT:

Location: High Court of PATEL ESTATE ROAD Karnataka JOGESHWARI (W) MUMBAI - 400 102 REPRESENTED BY ITS AUTHORISED SIGNATORY MR. BABA SAHEB GHORPADE …RESPONDENT (BY SRI K.G. RAGHAVAN, SENIOR ADVOCATE FOR SRI MANU PRABHAKAR KULKARNI, ADVOCATE)

THIS COMMERCIAL APPEAL IS FILED UNDER SECTION

13 (1A) OF THE COMMERCIAL COURTS ACT, 2015, PRAYING TO CALL FOR RECORDS FROM THE FILE OF THE LXXXV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU., IN COM. OS NO.1159/2023. (b) PASS AN ORDER TOWARDS SETTING ASIDE THE IMPUGNED ORDER DATED 25.07.2024 PASSED BY THE HON'BLE LXXXV CITY CIVIL AND SESSIONS JUDGE, BENGALURU (COMMERCIAL COURT -CCH-86), ON IA NO.2 UNDER ORDER 39 RULES 1 AND 2 R/W SEC.151 OF CPC., 1908, IN COM. OS NO.1159 OF 2023 & ETC.

THIS COMMERCIAL APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS DAY, JUDGMENT WAS PRONOUNCED AS UNDER:

CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MR. JUSTICE C.M. POONACHA C.A.V. JUDGMENT (PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)

INTRODUCTION

1. State Bank of India [SBI], had filed the present appeal under Section 13(1A) of the Commercial Courts Act, 2015 [CC Act impugning an order dated 25.07.2024 [impugned order] passed by the learned LXXXV Additional City Civil and Sessions Judge, Bengaluru [Commercial Court] in I.A. No.2 in Com.O.S.No.1159/2023.

2. The respondent, Patel Engineering Limited [PEL], has instituted the said suit, inter alia, seeking a decree declaring that no liability accrued under the guarantee executed by it. PEL had filed the above-mentioned application (I.A. No.2) under Order XXXIX Rules 1 and 2 read with Section 151 of the Code of Civil Procedure, 1908 [CPC], inter alia, seeking a temporary injunction restraining SBI, its officers, agents, representatives, assigns, sub-ordinates, and superiors from taking further proceedings or any steps or actions in respect to the PEL's guarantee dated 06.07.2018. PEL also sought directions to be issued to the SBI for removal of its name from Credit Information Bureau of India Limited [CIBIL] list as a defaulter of its corporate guarantee till disposal of the suit.

3. The learned commercial court has, in terms of the impugned order, restrained SBI from proceeding in respect of PEL’s corporate guarantee till the disposal of the suit.

4. In the meantime, SBI had filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 [IBC] before the National Company Law Tribunal [NCLT]. It had, prior to the initiation of the suit, also issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [SARFAESI Act demanding the amounts claimed from PEL as a guarantor. In view of the impugned order, SBI is precluded from pursuing its petition before the NCLT or under the Recovery of Debts and Bankruptcy Act, 1993 [RDB Act] for recovery of the amounts claimed by it.

PREFATORY FACTS

5. SBI had, in terms of the letter of arrangement dated 06.07.2018, sanctioned a term loan of `49,00,00,000/- (Rupees Forty Nine Crores only) under Builder Finance for Residential Housing Projects Scheme to GM Infinite Dwelling (India) Private Limited [hereafter referred to as ‘the Principal Borrower’ or ‘the Developer’] which is a company involved in the business of development of real estate. The said loan was sanctioned to enable